The German property market presented a heterogeneous picture in September. The overall index recorded a decline of 0.35 per cent to 221.77 points, but is up 0.84 per cent year-on-year. For condominiums, the index fell by 0.66 per cent to 218.39 points, which corresponds to a decrease of 0.53 per cent compared to the same month last year.
Similarly, prices for existing detached and semi-detached houses showed a decline. The index dropped by 0.69 per cent to 201.12 points in September. Compared to the previous year, existing houses are 0.12 per cent below the price level. A contrasting development can be observed for new builds: prices for new detached and semi-detached houses rose by 0.22 per cent in September to 245.80 points, marking a new high and an increase of 2.92 per cent compared to the same month last year.
Accessibility Issues and Price Discrepancies
Stefan Münter, Europace Board Member and Co-CEO, stated that September did not reflect a uniform market, but rather an accessibility problem. He pointed out that new builds are becoming increasingly difficult for many households to finance. Although purchase prices for existing properties are falling slightly, this does not yet create true affordability, as interest rates, ancillary acquisition costs and often necessary renovation requirements continue to pose significant hurdles. Münter emphasised the need to alleviate the burden on first-time buyers to make home ownership more broadly accessible.
The analysis by VALUE AG illustrates a widening gap between asking and transaction prices. While transaction prices for both condominiums and existing houses declined in September, asking prices proved more resilient. Sebastian Hein, Director Market Data at VALUE AG, explained that prices for concluded deals were already falling due to mortgage interest rates above four per cent, while sellers were holding onto spring prices.
Detailed Segment Analysis
- —Houses (asking prices): Asking prices for detached and semi-detached houses increased by 0.17 per cent in September compared to the previous month and have recorded monthly gains since April. Year-on-year, the increase is 1.9 per cent.
- —Condominiums (asking prices): For condominiums, asking prices fell by 0.32 per cent in September compared to August. This was the fourth consecutive decline, each by around a third of a per cent. The annual rate is only 0.3 per cent, the weakest value since late 2024, after over five per cent at the beginning of the year.
- —Rents (asking rents): Asking rents moved sideways in September. In the third quarter, they are just under four per cent above the previous year, thus continuing to rise significantly faster than purchase prices, although the increase noticeably flattened over the summer.
